China’s e-car push lures giants
VOLKSWAGEN, the German auto giant, is preparing for a swift expansion in its output of electric cars next year – and the biggest jump in production will be in China. General Motors is making China the hub of its electric car research and development. RenaultNissan, the French and Japanese carmaker, and Ford have hustled to set up joint electric car ventures in China.
Global automakers see the future of electric cars, and it looks Chinese. The biggest players are shifting crucial work to China as the country invests in car-charging stations and research and pushes automakers to embrace battery-powered vehicles.
China underscored that ambition over the weekend, when it said it would eventually ban the sale of petrol- and dieselpowered cars at an unspecified date. But the auto industry’s response – moving electric car design and production to China – represents a big risk.
From high-speed trains to wind turbines, China has long prodded US, European and Japanese companies to hand over their know-how in exchange for access to its market. Then Chinese companies have used that knowledge and lavish government support to take on foreign rivals.
China wants the big players to share their electric car knowledge, too. The foreign automakers face new Chinese regulations that put heavy legal pressure on them to transfer electric car technology to their local partners. Chinese officials are also set to impose stringent regulations that would force automakers such as Volkswagen and GM to sell new-energy cars in the country if they want to continue selling the old-fashioned petrol-powered types.
Still, Western companies say that they know the risks of transferring technology – and that the opportunities could help them reach their own electic-car ambitions faster.
“We are in a learning process with them together,” said Jochem Heizmann, CEO of VW’s China operations. “That process is much faster than we are used to doing these things.”
Electric cars are part of a broader debate about the country’s industrial ambitions. Under a plan called Made in China 2025, China hopes to become a dominant player in a number of other futurist new technolo- gies, such as artificial intelligence and robotics. Chinese officials argue that the push will help develop China’s economy and make it less dependent on foreign technology.
Some business groups and lawmakers – and increasingly, members of President Donald Trump’s administration – say company executives give away valuable trade secrets for the sake of short-term gains.
“We have no concerns relative to the amount of IP that has to be shared,” said Matt Tsien, the president of GM’s China operations, referring to intellectual property.
GM has been collaborating with its partner, the Shanghai Automotive Industry Corp, on advanced hybrid cars such as the Chevrolet Volt, which GM brought to China last spring as the Buick Velite. Hybrids like the Volt run on both battery power and petrol.
“We have a philosophy, from an overall perspective, that we build where we sell,” Tsien said.
Ford said only that it would comply with all Chinese rules on joint ventures. Renault-Nissan said its new joint venture with China’s Dongfeng Motor, called eGT, will design a new electric car that will be produced at a Dongfeng factory in the Chinese city of Shiyan.
China has a number of ways it can stay ahead in the electric car race.
Gao Feng Advisory, a Beijing-based consulting firm, estimates that China will have spent about $15 billion by 2020 installing charging stations for electric cars. China spent more than $1 billion subsidising research and development by 2015, with more still coming.
Generous subsidies for car buyers that can reach $9,000 have helped pique interest, though China plans to phase them out. Sales of battery-powered cars in China could top 400,000 by 2019, or about twofifths of the world’s sales of such cars.